A colony for 50 years, federated , Unified to Ethiopia , in 1991's seceded after three decades of rebellion. Since 1998 Eritrea is at War, harboring proxy warriors especially the notorious Al- Shabab. Torture ,imprisonment , thousands fleeing, no religious freedom , the only university is closed, everybody is in the army, No Parliament, No election, No functioning institution, No free press & all living journalists are in prison. Eritrea is called the North Korea of Africa.

For a first-time producer, it's remarkable how smoothly Nevsun Resources' (TSX: NSU) ramp-up and transition to fulltime mining have unrolled.

That was readily apparent from Nevsun's second quarter results, its first at full-bore commercial production.

Gold output was on target at over 1,000 ounces gold per day or 93,000 ounces and was up from 75,000 ounces gold in Nevsun's first quarter when it first hit commercial production. Cash costs remained low, at $301 per ounce gold, versus $299 in the first quarter.

Not surprisingly, with gold prices in the stratosphere and low cash costs, Nevsun generated strong cash flow. Net income was $61 million on $135 million in revenues.

As for production specifics, Nevsun milled 444,000 tonnes of ore @ 7.27 g/t gold, better than the 6.22 g/t Au grade in the first quarter. Gold recovery also inched up to 89 percent from 88 percent.

If there was anything left to quibble about it was the question of how much ENAMCO, Eritrea's state miner, would pay for its 30 percent stake in the Bisha mine. (In total it owns a 40 percent stake, as the state miner gets an automatic 10 percent free carried interest in mining projects.) That was a question Nevsun and ENAMCO agreed years ago to answer once the mine was in full swing.

A decision was to come by June 30, but when that deadline came Nevsun said the pricing was still under discussion as the two looked over independent assessments of the mine value. More than a month has past since then and there was no word on progress in the quarterly update.

But Cliff Davis, Nevsun President and CEO, appeared undisturbed by the delay. In a recent email to Mineweb, Davis said that while Nevsun couldn't talk about the matter in detail, "we are comfortable with the process." He also noted the delayed pricing of the 30 percent stake had no impact on operations.

He added, "However, naturally we would prefer to have had this finalized and announced a while back."

In the end, the question comes down to how much of the cash flow from the Bisha mine Nevsun will get to keep, as ENAMCO can pay for its 30 percent share of Bisha through those proceeds.

And for the time that cash flow looks like it will remain strong. Nevsun is fortunate to be hitting its stride as gold prices reach new heights and to be mining an open pit deposit unusually rich in near surface gold.